Bottom Third of Housing Market Continues to Drag Prices Down

Written by Dean Baker

Tuesday, 25 January 2011 12:00

Home prices continue to fall, dropping a full percentage point in November, according to the Case-Shiller 20-City index. Nineteen of the 20 cities in the index showed a decline in prices, with the sharpest declines occuring in Atlanta, Chicago, Cleveland, Detroit and Minneapolis. San Diego was the only city where prices rose, albeit by only 0.1 percent. The 20-city index has fallen at an annual rate of 11.9 percent over the last three months and is down by 1.9 percent year over year.

The price declines continue to be led by the bottom third of the market, which is in a virtual free fall in several cities. In Atlanta, prices for homes in the bottom tier fell by 9.4 percent in November and have fallen at a 69.6 percent annual rate over the last three months. In Minneapolis, prices for bottom-tier homes fell by 1.7 percent in November and dropped at a 40.9 percent annual rate over the last three months. The annual rate of decline for bottom-tier homes over the last three months was 16.3 percent in New York, 21.7 percent in Boston, 28.8 percent in Chicago and 31.8 percent in Portland.